Homeowner saddled with reverse mortgage she never asked for

But the retired nurse refused. She wanted to stay put. This home was hers, owned outright, free and clear.

Then in 2014, a parade of door-to-door salespeople began arriving at Early’s door, aggressively selling HVAC equipment and appliance rentals. First it was a water heater, then a water purifier, then a water softener. Early thought she was boosting the value of her home. But she was actually losing her equity.

In early 2022, Early was surprised to receive a welcome letter from HomeEquity Bank noting a $405,000 CHIP reverse mortgage had been issued in her name. The revelation triggered the legal fight of her life, unearthing a document trail showing she had been the victim of an elaborate and co-ordinated scheme that culminated in her being saddled with a mortgage that she said she never signed up for.

“I realized I was in a real mess,” said the 71-year-old.

Records the Star obtained from criminal and civil proceedings raise troubling questions about how a bank that touts its commitment to protecting seniors from financial abuse got ensnared in an alleged fraud scheme that reached far beyond Early’s doorstep.

A third-party mortgage broker who was involved in Early’s loan is also accused of bringing at least 25 other seniors to HomeEquity Bank in transactions that are considered suspicious, Early alleges in a court filing. The broker has been arrested and criminally charged with fraud in a case involving a Brantford resident. The Ontario regulator for mortgage brokers investigated and recently fined the same broker $140,000 for “conduct that targeted and exploited vulnerable consumers using unsuitable, high-fee mortgages.”

There was also turmoil within HomeEquity Bank. Concerned about the police investigation into the broker, as well as “suspect mortgage transactions” with “obvious problems,” the bank launched its own internal investigation, then fired a mortgage specialist.

That employee, who had also signed off on Early’s loan, later alleged in a civil court case that “systemic flaws” in the bank’s mortgage funding and vetting process allowed the third-party broker to dupe multiple seniors.

A spokesperson for HomeEquity told the Star that the bank acted swiftly after fraudulent activity was uncovered, working with affected customers and co-operating with authorities. “Our top priority is the safety and security of our customers, and we are committed to preventing and combating fraud. As fraudulent scams evolve HomeEquity Bank continues to enhance safeguards, strengthen broker oversight, and provide ongoing education to ensure our customers remain protected.”

HomeEquity, which promotes its reverse mortgage loans to seniors nationwide as a pathway to financial freedom, refuses to forgive Early’s debt and is now suing her. One of the bank’s court filings says Early benefitted from the proceeds of the mortgage, using them to pay off her other debts.

“We have no comment on Ms. Early’s case, as this matter is before the courts,” said HomeEquity spokesperson Yvonne Ziomecki-Fisher.

Early’s reverse mortgage would secure $405,000 out of her home’s equity, with an annual cost of borrowing of 4.98 per cent. In five years, she would owe the bank $111,000 on top of the principal, according to a HomeEquity estimate.

But Early never met or talked with Kim Do, the third-party broker whose name is on correspondence relating to Early’s mortgage, anyone from Do’s brokerage, nor anyone from HomeEquity Bank to discuss the reverse mortgage or the closing documents, she said.

Given its emphasis on seniors’ fraud awareness and its pledge to follow a “seniors code” to protect its vulnerable clients, the bank should not have missed the red flags that she was being targeted by a network of scammers, Early alleges.

Before HomeEquity issued the reverse mortgage, there were multiple Notices of Security Interest (NOSIs) registered on Early’s property title by some of the companies that financed her equipment.

A NOSI is a financial tool similar to a lien. Ontario banned their use for consumer goods last year, with officials concerned about “bad actors” using NOSIs to “extort exorbitant payments from consumers, particularly seniors.”

By using aggressive sales tactics, the companies would get a homeowner to sign a high-interest contract for home improvement equipment. Then something would go wrong — the product proved defective, for example, and the homeowner could not get the company to address the issue and would eventually stop paying bills.

When the homeowner later tried to sell or refinance their home, they found out the company had registered NOSIs on the property without informing them. The company would then pressure the homeowner to negotiate a buyout of the contract, with a potentially huge payout.

In the years leading up to HomeEquity issuing a reverse mortgage to Early in 2022, her property title shows six NOSIs had been put on her house.

During the mortgage closing process, records show one of Early’s electronic documents was accessed in Kitchener and at another time, in Petawawa, though she was not in either place at the time, her countersuit also claims.

Early, who has mild cognitive impairment and Charcot-Marie-Tooth disease, which has curled her fingers and limited the function of her hands, said she could not have completed 12 signatures and 27 initials in the four minutes that the electronic document profile said that it took her to complete.

Two HomeEquity employees also signed the mortgage documents — mortgage specialist Jaina Tailor and senior business development manager Sean Russell, both of whom worked with Do as the bank worked to grow its reverse mortgage portfolio.

Driven by baby boomers wanting to supplement their income while staying in their home, demand for reverse mortgages has surged.

A reverse mortgage allows a borrower to receive money from their home’s equity without having to sell the property. The principal is to be repaid when the homeowner sells the property, moves out or dies.

HomeEquity is at the front of the wave, riding it to an appearance on a list of Canada’s top growing companies for five years.

The bank recruited celebrity figure skater Kurt Browning as a spokesperson and former news anchor Peter Mansbridge as a communications consultant.

“(Seniors have) been able to access tax-free cash — yes, tax-free — from their home so that they can live retirement on their terms,” says former Olympic figure skater Kurt Browning in one ad. “And that’s a good thing.”

In a reverse mortgage, the borrower is not required to make regular payments on the loan. But until paid off in full, the debt can rise while the house equity keeps going down as interest is added to the balance every month.

As for why Early alleges she was never told about any of these risks or even made aware she was being signed up for a reverse mortgage, no one at the bank would say, including Jaina Tailor, the HomeEquity mortgage specialist who worked on her file but who did not respond to questions from the Star. In its lawsuit against Early, the bank denies that it missed warning signs that Early was being defrauded.

After she was fired, Tailor filed a wrongful termination lawsuit, pulling back a curtain to reveal problems within the bank.

Tailor worked with Do, she said in the lawsuit, but had no knowledge of the alleged scams Do helped run on seniors. She pointed the finger at her more highly paid and senior HomeEquity colleague Sean Russell, who was responsible for the bank’s relationship with Do, she said. “In fact, in 2022, when Ms. Do moved territories, Mr. Russell obtained special approval from (HomeEquity Bank) to keep Ms. Do as his broker partner,” the lawsuit said.

During a three-hour interview by the law firm hired by HomeEquity to conduct the internal probe, Tailor was asked about 10 to 15 files involving Do, she said. She was also interviewed by a Waterloo Regional police detective investigating Do. The officer told Tailor he did not believe she was to blame, her lawsuit said.

Tailor said she was scapegoated by the bank after the Do criminal charges put a spotlight on the suspect mortgages and that Russell, “who makes considerable money” for the bank, was initially put on administrative leave but otherwise escaped blame.

Russell did not respond to a request for comment. A past photo on his LinkedIn account shows him and a “Kim Do” celebrating an “incredible partnership” resulting in more than 30 reverse mortgages.

The bank would not comment on Tailor’s and Russell’s roles in Early’s mortgage. In its statement of defence to Tailor’s wrongful dismissal claim, the bank denied she was scapegoated and said she failed to spot signs of elder abuse despite comprehensive training on the indicators of mortgage fraud.

Tailor was “integrally involved in the suspect files at all stages and was responsible for moving files forward through the funding process,” the bank’s statement of defence said. “It was (her) responsibility to review documents provided by Ms. Do, to follow up with Ms. Do on incomplete or outstanding documentation, and to liaise internally with HomeEquity Bank’s staff to process the mortgage files.”

The bank also denied Tailor’s claim that it had “systemic flaws in (its) mortgage funding and vetting process.” HomeEquity declined to tell the Star how many seniors were affected by the “suspect” mortgages.

Tailor’s lawsuit seeking at least $190,000 in damages was resolved by mutual consent in August 2024, though terms were not disclosed.

Do, who worked for a brokerage in Mississauga at the time Early was signed up for the reverse mortgage, declined to answer questions through her lawyer, Bruce Daley. In a statement from the firm, Daley said to “let these matters unfold through the judicial system.”

Do remains charged with defrauding a Brantford homeowner. The mortgage brokerage she worked for had its license revoked as part of the same probe by the Financial Services Regulatory Authority of Ontario (FSRA) that resulted in Do’s fine.

Early’s case is now with Peel Regional Police’s fraud bureau, a police spokesperson confirmed.

Early was embarrassed. She had trusted the salespeople and they betrayed her. Her sister pushed her to seek help, even if it meant having to tell others what had happened to her.

She took her allegations of fraud to the provincial Director of Titles, a regulator who can investigate property-related complaints. Then HomeEquity Bank sued Early, saying she spent most of the cash she got from the reverse mortgage to pay off other debts, and it would be unfair for her to not “repay the benefit received.”

The land title director’s office, also named as a defendant in the bank’s lawsuit, declined to comment on whether it was investigating Early’s complaint.

Early took her fight directly to the bank. She filed a counterclaim. She claims the bank failed to protect her in its pursuit of profits from the reverse mortgages it markets to seniors nationwide.

“Each time I hear that commercial on TV with Kurt Browning, I just want to choke,” said Early. “About HomeEquity making your life so much easier. No, it doesn’t.”

On Centre Street, Early walks around her home, pointing to some of the sloppy renos that were done after yet still more door-to-door salespeople pressured her into overpriced home improvement projects she did not need.

Her oak hardwood floors were replaced with cheap laminate. Her new tub was sloppily installed. When the contractors tied up the curtains one day during their work, Early saw a cavity the size of a cantaloupe in the wall of her guest bedroom.

The renovations caused “damage to fixtures, walls, and furniture, and were generally so poorly executed that some require repair or completion,” her countersuit alleges. “The work done is functionally and financially worthless.”

Early regrets putting her trust in the strangers. To this day, she won’t answer the phone unless she knows the caller.

“You always have to kind of look over your shoulder to see who’s the next guy who’s going to try to rip you off,” she said.